Amazon has joined a small club of British corporate taxpayers writing nine-figure cheques to the Exchequer, telling investors and ministers that its direct UK tax bill climbed above £1.3 billion in 2025, a jump of around 20 per cent on the previous year.
The Seattle-based group, which now employs roughly 75,000 people across the country, said the increase was driven largely by Chancellor Rachel Reeves’s higher rate of employers’ national insurance and by another year of revenue growth at its UK marketplace and cloud businesses.
UK turnover edged up to about £30 billion in 2025 from £29 billion in 2024, as British shoppers continued to migrate spending online and corporate customers signed fresh contracts with Amazon Web Services. Total taxes administered on behalf of the Government, including VAT, PAYE and employee national insurance, rose to roughly £5 billion, from £4.7 billion a year earlier.
A £1bn taxpayer, but the detail is still missing
It is only the second year Amazon has cleared the £1 billion direct-tax threshold, putting it alongside the likes of Lloyds Banking Group, NatWest and GSK. The company has declined, however, to break the figure down between corporation tax, business rates, employer national insurance and the digital services tax, the disclosure campaigners say is the only way to settle the long-running argument about whether the e-commerce giant pays its fair share.
Dan Neidle, founder of Tax Policy Associates and one of Westminster’s most-quoted tax commentators, was unimpressed. “If they really want to be open they should publish a proper breakdown of the different taxes,” he said. “This mixes together a bunch of different taxes, so gives us no idea how much corporation tax they pay. Are they paying a fair amount? Or are they playing tricks? They don’t tell us.”
Amazon faced years of criticism for paying minimal or no corporation tax in 2021 and 2022, when it benefited from former chancellor Rishi Sunak’s “super-deduction” capital allowance. The relief expired in 2023, since when its corporation tax payments have been rising again — though the company has previously been criticised for the structure of its main UK division, which routes much of its retail activity through a Luxembourg-based parent.
The employer NI hike does the heavy lifting
The biggest single driver of Amazon’s swollen 2025 bill was not its retail margin or AWS profitability, it was payroll. Employers’ national insurance contributions rose to 15 per cent from 13.8 per cent on 6 April 2025, and the secondary threshold at which employers begin paying was cut from £9,100 to £5,000.
For a workforce the size of Amazon’s, the maths is brutal. The company is now one of the top ten private-sector employers in the UK, alongside Tesco, the NHS supply chain and the big four supermarkets, meaning every percentage point of NI translates into tens of millions of pounds.
That same arithmetic, however, is hammering Britain’s small and medium-sized employers, for whom there is no AWS margin to absorb the cost. As Business Matters has reported, the employer NIC bill has jumped £28 billion above Treasury forecasts, and the OECD warned earlier this year that the UK now has the largest employer tax rise in the developed world. Where Amazon can shrug off the increase, smaller firms have been forced to freeze hiring, lift prices or shed staff.
£40bn investment pitch, and the politics of scale
Alongside the tax disclosure, Amazon restated its commitment to spending £40 billion in the UK by 2027, a figure first put to ministers last summer and welcomed by Downing Street as one of the largest foreign direct investment pledges since the pandemic. The company said £15 billion of that had already been deployed in 2025 alone, including a new film and television studio campus, a London office complex in Shoreditch, and the country’s first commercial drone-delivery hub in Darlington.
A further £8 billion is earmarked for data centres between 2024 and 2028 , a strategic bet on AWS as British corporates and Whitehall departments accelerate the migration of workloads to the cloud and adopt generative AI tools.
“As we continue to invest in our UK operations and workforce, we help fund public services and infrastructure across the country,” the company said in a statement.
What it means for SMEs
For Britain’s owner-managed businesses, Amazon’s announcement is a Rorschach test. To ministers, it is proof that the UK remains an attractive home for global capital even after a punishing run of tax rises. To critics, it is a reminder that a company turning over £30 billion can absorb a 1.2-point NI hike without flinching, while the corner-shop economy cannot.
What is not in dispute is that the headline figure, £1.3 billion, would mean a great deal more if Amazon broke it apart. Until it does, the question Dan Neidle posed will continue to hang over every press release the company issues: a fair share, or a clever sum?
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Amazon’s UK tax bill tops £1.3bn as employer NI hike and £30bn sales drive the total higher